Wireless Spectrum Policy – TRAI Open House
The key discussion points and takeaways from the proceedings of TRAI’s Open House on Indian Wireless Spectrum is as below,
- Subscriber Number Based allocation ir-relevant – There was near consensus on the subscriber base no longer being the right parameter to be eligible for additional spectrum. Alternatives suggested include traffic based criteria or auctions for 2G spectrum. RCom and Tata Telservices did not raise the issue of their eligibility for 6.2Mhz (original allocation of 4.4Mhz), based on their current sub base in various circles.
2G GSM + CDMA Spectrum Allocation till Date Vs Subscribers in India
I undertook a joint study with an associate of mine on the distribution and allocation of 2G Wireless Spectrum in India across all Circles and all operators. The main motive of the study was of course to figure out viability of wireless broadband for various operators. However, I thought I’ll share the Spectrum that operators are holding to as it is now believed to be a Multi-Billion Dollar SCAM 
My associate has published the complete mobile spectrum allocation details here [ Recently, you heard A.Raja blaming it back on BJP Government, you can make the guess by browsing the Matrix ].
BSNL+ MTNL together are holding the highest Spectrum Read more
3G + WiMax Spectrum Auction to be Delayed
Close on the heels of DoT postponing the auction of 3G and WiMax Spectrum auction, the Finance Ministry has proposed to double the base spectrum charges for both 3G and WiMax. The reserve spectrum charge for 3G which was Rs 1650 2,020 crore earlier is now proposed to be Rs 4,040 crore while that for WiMax will be Rs 1,650 2,020 crore. [Excluding Rajasthan and North East where no spectrum is available, the reserve will be Rs 1,910 cr and proposed by FM will be 3,820 cr]
This proposed hike in reserve price unlikely to have any major impact on 3G bidding because the business case suggests that operators can shell out up to Rs 5,000 crore for pan India 3G license. However, for Wimax BWA spectrum the fees definitely looks higher as the Government was determined to push broadband to every remote corner of India. Any additional levies of administration fees, revenue sharing etc will impact 3G bidding.
The New Schedule for 3G + WiMax BWA Auction is as follows:
- Final Date of Applications – Jan-15
- Publication of Ownership Details – Jan-16 to Jan-19
- Bidder Ownership Compliance Certificates – Jan-20 to Jan-21
- Pre-qualification of bidders – Jan-22
- Mock Auction – Jan27 / Jan-28
- 3G Spectrum Auction on Jan-30th
- WiMax BWA Spectrum Auction – 2 days after close of 3G
Update your calendars and stay tuned for latest updates.
3G + BWA Auction – Spectrum Availability
The DoT has announced the time line for the auction of 3G Spectrum and BWA Spectrum. Earlier it was reported that BWA Auction would happen first. However, DoT is now auctioning the 3G spectrum first and BWA later. As proposed earlier, BSNL / MTNL have got a backdoor entry in all circles for both 3G and BWA spectrum and hence we exclude their reference in the rest of this article. Each operator is eligible for only one block in 3G and BWA [DoT will pre-scan applicants and qualify them for the bidding process] Hopefully, they will make the list of eligible participants public so that we can identify dummy companies like Swan once upon a time backed by RCom.
3G Spectrum Auction: 2x5MHz comprises a block in 2.1 GHz. The proposed date of auction is 16th Jan-2009.
- Expect intense bidding in Delhi and Gujarat Circles as only 2 blocks are available for auction.
- West Bengal excluding Kolkata has only 1 block available for auction.
- Mumbai, Kolkata, Karnataka, Mahrashtra, Andhra Pradesh, Tamil Nadu, Kerala, Punjab, Haryana, UP(E), MP, Bihar, Orissa, Assam and Jammu & Kashmir have 4 spectrum blocks to be auctioned.
- UP(E) and Himachal Pradesh have 3 spectrum blocks, while Rajasthan and North East have None.
- Reserved bid amount is as published earlier.
BWA Spctrum Auction: 3 Blocks of 20 MHz available for auction across India in 2.3 GHz and 2.5 GHz. Proposd Date of Auction is 2 days from the day of close of 3G Auction.
While I fetch the final guidelines on the 3G + BWA auction, you can go ahead and make a guess on what the prices of winning bid are likely to be in Delhi, Mumbai, Kolkata, Gujarat, Mahrashtra, Karnataka, Tamil Nadu [includes Chennai for 3G+ BWA auction] and Andhra Pradesh.
Restrict 3G Licenses to Existing Operators – TRAI
TRAI in its recommendations released just a while ago is of the view that 3G Spectrum Licenses be restricted to existing Telecom Players – UASL / CMTS licensees.� These recommendations come at a critical time as the Spctrum Auction schedule is already announced. DoT is of the view that 3G licenses could be awarded to
new prospective service providers should have minimum one year experience in Telecom Sector in India or abroad of 8 providing at least 5 lakhs (500000) wireless access lines (2G, 3G services).
TRAI is of the view that DoT’s view doesn’t consider service providers who have been granted UAS license recently. [Unitech, Videocon Datacom, Swan, Loop etc] Anyway,they turned out to be speculators.
Why TRAI is against permitting non-existing players to be allowed at 3G auction ?
TRAI is of the view that the bidder may not have 2G UASL license and hence may bid for higher in 3G auction which will result in,
- High tariffs for 3G services
- Deprive existing operators from providing 3G services
and finally adds,
The Authority firmly believes that in the interest of the growth of the Indian telecom sector, entry of this kind must be strongly discouraged.
TRAI’s recommendations also include,
- The spectrum module for auction should be 2X5 MHz.
- The total availability of spectrum should be made public at the stage of the auction so that the bidders are fully aware regarding the first and subsequent phase of allocation on the price determined by the auction.
- Further review to be taken after a period of 3 years
So the problem we have on hand is, if foreign Telcos without 2G licensee are prohibited from the auction, then spectrum auction may result in lesser revenues to the Government. And if they are permitted and if 3G services are costly [as assumed by TRAI], it is the question of affordability and acceptability by consumers.
Spectrum + License Scam – A. Raja Defends + Lock-in Proposal + Insider Views
In the new 2G operator licensing and spectrum allotment scam, Telecom Minister A. Raja tried to defend his First-Come First-Serve allotment in a press conference but TRAI has always maintained a distance from A. Raja’s policy since allotment as it always wants to be recognized as a powerful Telecom Regulatory functioning with integrity. TOI writes that A. Raja has very weak standing in this case.
I strongly criticized A. Raja’s spectrum allocation move in Feb-08 but in vain. Why didn’t our dear politicians in the Left / Communist act then ? Don’t they all know prevention is better than cure ? Do our Left / Communist political bosses want a Nano shift to happen in new Telecom operators + licenses ?
3 year lock-in for new operators – An Eye wash:
It is the Government under the able leadership of A.Raja which has committed the mistake [or with vested interest ?] of allowing new licensees to sell their stake without any roll-out obligations or commitments. Now A. raja is making an attempt to dilute the issue by a fresh 3 year lock-in period clause.
Insider Views:
What has happened is, cash rich companies like Unitech and Swan [was once backed by Anil Ambani, but the thin thread seems to be cut now and is now part of Mumbai based Realty Major Dynamix Balwas] floated wireless subsidiaries and wanted to make a quick buck by getting the license and spectrum and sell it off to some foreign operator [It is a suspense which only A. Raja can confess on why he opted for the First-Come First Serve Policy]. But due to Global Economic crisis, the plan didn’t work as well as they expected but they still managed to pull the strings together and rake in a moolah. Unitech Sold stake to Telnor and Swan sold stake to Etisalat. This is when the Political bosses in Left / Communist woke up as they realized what was the true value of 2G mobile license and spectrum 
I am wondering what is the solution to the problem, when elected representatives of people act against the interest of the Nation.
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